Commodity Market Continued Upward Trajectory in April - FOX 8 WVUE New Orleans News, Weather, Sports

Commodity Market Continued Upward Trajectory in April

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SOURCE Credit Suisse AG

NEW YORK, May 12, 2014 /PRNewswire/ -- Commodities increased in April as positive fundamentals continued to support returns.

Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management business, said, "Commodities continued an upward trajectory in April, and exhibited uncorrelated returns with traditional asset classes.  It is noteworthy that the gains commodities have made thus far in 2014 have coincided with a period of lower than expected GDP growth for China.  If this were 2012 or even 2013, sluggish data out of China most likely would have weighed heavily on commodities, making any fundamental idiosyncratic drivers of individual commodities insignificant.  Instead, one-off event-driven risks which negatively affected supplies have actually been reflected in commodity return dynamics.  If and when Chinese growth troughs, any advances here may support further upside to the commodities asset class."

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Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "There is increasing possibility that domestic market core inflation may rise as improving growth prospects begin to reverse the persistent disinflation that was visible in many economies over the past few years.  The most recent US nonfarm payrolls number was well above consensus expectations, and despite first quarter GDP weakness, risks seem to be skewed to US economic growth coming in stronger than anticipated going forward.  The risk of inflation overshooting expectations is elevated.  As a result, we believe investors will continue to benefit from the diversification benefits commodities offer as part of a portfolio." 

The Dow Jones-UBS Commodity Index Total Return increased 2.44% in April.  Overall, 16 out of 22 index constituents posted positive returns.  Agriculture was the best performing sector, up 3.48%, led by Coffee.  Wheat also gained amid increased tensions between the West and Russia over Ukraine and a mid-month cold snap in the US, both of which threatened to limit supplies.  Energy increased 2.98%, led by Natural Gas, due to lingering supply concerns.  Gasoline also increased due to expectations of strong US demand as summer approaches, and relatively low inventory levels.  Industrial Metals gained 2.98%.  In addition to Nickel, Copper increased as a result of declining global inventories and better than expected durable goods data in the US.  Precious Metals was relatively unchanged, down 0.09%.  Although Silver decreased, Gold ended the month higher as escalating geopolitical tensions in Ukraine boosted the metal's safe-haven appeal.  Livestock declined 1.57%, led lower by Lean Hogs.

About the Credit Suisse Total Commodity Return Strategy
Credit Suisse's Total Commodity Return Strategy has been managed for over 19 years and seeks to outperform the return of a commodities index, such as the Dow Jones–UBS Commodity Index Total Return or the S&P GSCI Total Return Index, using both a quantitative and qualitative commodity research process. Commodity index total returns are achieved through:

  • Spot Return: price return on specified commodity futures contracts;
  • Roll Yield: impact due to migration of futures positions from near to far contracts; and
  • Collateral Yield: return earned on collateral for the futures.

As of April 30, 2014, the Team managed approximately USD 11.8 billion in assets globally.

Credit Suisse AG
Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse is able to offer clients its expertise in the areas of private banking, investment banking and asset management from a single source. Credit Suisse provides specialist advisory services, comprehensive solutions and innovative products to companies, institutional clients and high net worth private clients worldwide, and also to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 46,000 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.

Asset Management
In its Asset Management business, Credit Suisse offers products across a broad spectrum of investment classes, including hedge funds, credit, index, real estate, commodities and private equity products, as well as multi-asset class solutions, which include equities and fixed income products. Credit Suisse's Asset Management business manages portfolios, mutual funds and other investment vehicles for a broad spectrum of clients ranging from governments, institutions and corporations to private individuals. With offices focused on asset management in 19 countries, Credit Suisse's Asset Management business is operated as a globally integrated network to deliver the bank's best investment ideas and capabilities to clients around the world.

All businesses of Credit Suisse are subject to distinct regulatory requirements; certain products and services may not be available in all jurisdictions or to all client types.

Important Legal Information
This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change without obligation to update. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not a guide to future performance. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.

Certain information contained in this document constitutes "Forward-Looking Statements" (including observations about markets and industry and regulatory trends as of the original date of this document), which can be identified by the use of forward-looking terminology such as "may", "will", "should", "expect", "anticipate", "target", "project", "estimate", "intend", "continue" or "believe", or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties beyond our control, actual events, results or performance may differ materially from those reflected or contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on such statements. Credit Suisse has no obligation to update any of the forward-looking statements in this document.

Certain risks relating to investing in Commodities and Commodity-Linked Investments:  Exposure to commodity markets should only form a small part of a diversified portfolio. Investment in commodity markets may not be suitable for all investors. Commodity investments will be affected by changes in overall market movements, commodity volatility, exchange-rate movements, changes in interest rates, and factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Commodity markets are highly volatile. The risk of loss in commodities and commodity-linked investments can be substantial. There is generally a high degree of leverage in commodity investing that can significantly magnify losses. Gains or losses from speculative derivative positions may be much greater than the derivative's original cost. An investment in commodities is not a complete investment program and should represent only a portion of an investor's portfolio management strategy.

Copyright © 2014, CREDIT SUISSE GROUP AG and/or its affiliates.  All rights reserved.

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